Along with the flood of news coverage of the Flint water crisis comes the flood of litigation. So far, early indications show a wrong in search of a remedy, and for criminal defendants, just the expected plea deals. Here are some highlights.

In April, a federal district judge dismissed for lack of subject matter jurisdiction a §1983 claim for “safe and portable water” as preempted by the Safe Drinking Water Act. The case is on appeal.

Class actions have been filed against state and municipal officials in federal court, the Michigan Court of Claims, and Genesee County Circuit Court, seeking damages for personal injuries, property damages, and relief from water bills. Along with the usual governmental immunity defense, defendants assert a statute of limitations defense, with a fair likelihood of success. The governmental immunity defense is complicated by Governor Snyder admitting fault. That admission strengthens plaintiffs’ gross negligence exception to governmental immunity.

So far, the Attorney General’s criminal charges have resulted in the usual plea deals by underlings. The Flint water quality supervisor whom I lauded in a previous post as the only principled public servant in this mess (a position with which the Attorney General agrees) pled no contest to willful neglect of duty; the plea is essentially nothing, because the court took the plea under advisement with dismissal in one year if the supervisor cooperates with the investigation. A state official reached a second plea deal, pleading no contest to willful neglect of duty regarding an outbreak of legionnaire’s disease with the usual cooperation clause.

Politics saturates the Flint legal landscape. Attorney General Bill Schuette is widely expected to run for governor in 2018 and must therefore appear to be doing something, such as filing an unusual professional negligence and public nuisance claim against the Flint outside engineering firms. And when the Flint mayor notified Michigan of intent to sue the state, the state receivership board with continuing jurisdiction over Flint removed the city’s authority to sue.

For well over a decade states and stakeholders have been trying to develop water quality trading and offset programs to facilitate compliance with the Clean Water Act. The goal of “trading” is to allow a discharger who can cost-effectively reduce pollutants to a lower level than legally required to sell the resulting “credit” to another source whose per-unit cost of reducing that same pollutant is greater. The “credit” is the amount of reduction achieved by the credit generator beyond compliance. The result is more cost-effective compliance.

An “offset” involves using a “credit” to offset a new or increased discharge to a water body which is not achieving water quality standards (often referred to as “impaired”) for that pollutant. Without such an offset, any new discharge to an impaired water body is illegal, because it would exacerbate the standards violation. Typically the credit or offset is incorporated into the permit of the user, and is thereby enforceable.

Recognizing these benefits, EPA supports trading, and issued a policy and guidance memo in 2003. One of the most promising opportunities for trading is the reduction of nitrogen, phosphorus and sediment, which are causing water quality problems across the country. Farms typically have nonpoint source discharges of all three of these pollutants, and can reduce the volume much more cost-effectively than a municipal or industrial point source, which is the typical buyer. However, efforts to establish trading programs have run into problems, such as determining a measurable “baseline” compliance level for a nonpoint source credit generator before a credit can be generated. Nonpoint sources typically use “best management practices” (BMPs) to achieve pollution reductions representing their fair share of loading allocations for the water body to which they discharge. Before a farmer can generate a credit, his “fair share”, or baseline, must be both determined and met.

Additional problems include protecting local water quality where the credit is used, verifying the implementation of a credit, and accounting for uncertainty in the amount of pollution reduction which a BMP implemented at a non-point source will actually achieve. As a result, while many states have tried to establish such programs, including the development of regulations, very few have been successful.

To address these problems, EPA over the past 3 years has issued 8 “technical memoranda” (TMs) which set forth EPA’s “expectations” for the contents of an effective trading program within the Chesapeake Bay watershed. This is, in effect, a pilot. The reason for the focus on this 64,000 square mile watershed is that in 2010 EPA published the biggest total maximum daily load (TMDL) ever issued under the CWA, which sets forth pollutant loading allocations which must be achieved throughout the watershed in order to achieve compliance with applicable water quality standards. I described this TMDL in a previous post entitled EPA Issues Biggest TMDL Ever for Chesapeake Watershed, posted on March 4, 2011. Faced with huge costs to achieve the reductions, many of the states are looking at trading.

To maximize the likelihood that such trades will be carried out in compliance with the CWA, EPA issued the TMs for use by the Bay states in designing their programs. They address baseline determination, duration of credits, components of a credit calculation, protection of local water quality, accounting for uncertainty of the water quality benefit of a BMP, representative sampling, verification and certification (including inspections and public availability of all relevant documents), and accounting for growth (including need for an “offset” program). The “credit calculation” TM addresses, among other things “additionality” (the requirement that any trade must result in a net reduction of pollution) and “leakage” (when a pollutant load reduction at one location indirectly causes an increase in pollution elsewhere). These can be accessed on EPA’s “Trading and Offsets in the Chesapeake Bay Watershed” web site. They are not regulations or even “official agency guidance” (says EPA), and do not have the force of law. They do set forth EPA’s “expectations”. EPA officials have said that each state trading program will be reviewed for consistency with these TMs.

For those around the country who are trying to design and implement trading programs, these TMs can be enormously helpful. They are fairly brief (typically 6 to 12 pages), clear and concise. And who among us would not support more cost-effective reduction of pollution?

The New Mexico Water Quality Control Commission enacted what is arguably the most comprehensive copper mine remediation rule in the country. The Copper Rule requires copper mines to uniformly implement prescriptive measures of pollution control and to protect ground water at “foreseeable places of withdrawal.” But does the Copper Rule really prevent pollution, as required by the New Mexico Water Quality Act? Not so, say the Attorney General and various NGOs, who appealed the case to the New Mexico Court of Appeals. They claimed that the Copper Rule’s uniform monitoring criteria, which require the placement of a monitoring well network as close as practicable around the perimeter of mine units, does not sufficiently protect ground water and therefore fails to satisfy the Water Quality Act’s mandate that contaminant concentrations not exceed permissible standards at places of withdrawal. The Court of Appeals affirmed the Commission’s rule-making in Gila Resources Information Project v. N.M. Water Quality Control Comm’n, holding that the determination of a “place of withdrawal” has always been and remains a matter committed to the Commission’s discretion. [Link to Case.]

The New Mexico Supreme Court will now consider whether the New Mexico Water Quality Control Commission has the authority, under the Water Quality Act, to adopt the regulations imposing prescriptive pollution controls and defining by rule, rather than on a case-by-case basis, the type of monitoring controls which essentially define protectable ground water as that existing on the exterior of active mine units. After a number of swings of the bat, the petitioners in the Supreme Court have refined their arguments. They now claim that the Water Quality Act requires a case-by-case determination of a place of withdrawal, based on particular aquifer characteristics, rather than a definition derived by rule. To succeed with this challenge, the petitioners must overcome the legislature’s mandate, in the 2009 amendments to the Water Quality Act, that the Commission adopt uniform monitoring requirements for the entire copper industry. The battle seems to be whether the Copper Rule is sufficiently flexible to protect all places of withdrawal – regardless of where located – or whether the rule imposes a de facto definition of a place of withdrawal based on criteria that may not be tailored specifically to the aquifer characteristics at a particular site. Oral argument is set for September 28, 2016.

Congress in recent years has not really been in the business of solving core public welfare problems like safe drinking water. Today the Senate, however, has taken a major step forward by passing the 2016 Water Resources and Development Act, S. 2848. WRDA bills are the annual appropriations bills to shore up the nation’s water service infrastructure. The Senate bill would provide $9.4 billion for water projects, hydrology and flood control, including $4.9 billion to address aging municipal water systems.

By and large, Americans take for granted that their municipal water supply systems deliver abundant, wholesome and safe drinking water. Water borne illnesses are rare in this country, and the professionals I know that operate these systems take their jobs seriously and feel the weight of the responsibility. And yet, there are colossal failures putting public health at risk—like Flint.

The Flint debacle reflects a complete absence of professional water management. The problem there was a change in water supply, and the failure to add commonly available corrosion inhibiting chemicals to the water to prevent lead pipelines from leaching lead into Flint homes. What should have been an inexpensive operational measure became a billion dollar pipe replacement project. And that figure doesn’t include the long-term costs to address health effects of drinking the water, not to mention the cost of a different kind of corrosion, that of the public trust.

But even well-managed municipal water systems, including those that tout the high quality of the supply, can have serious lead problems. My town of Portland, Oregon, has one of the purest water sources in the country, the Bull Run water shed on Mt. Hood. The water is so soft, however, that it has a corrosive effect. Luckily Portland doesn’t have lead service pipes like Flint, but many older homes have lead solder in their plumbing, resulting in Portland exceeding lead drinking water standardsin high risk households and schools.

The Portland Water Bureauis taking steps to address the lead problem, like raising the pH level in the water to minimize lead leaching. But Portland’s water rates are among the highest in the country, and the cost of maintaining safe water supplies is only going up. There is a practical limit to how high water rates can go, and communities with fewer resources than Portland struggle to keep up.

This is where the federal government is supposed to step in, to address problems that exceed local capacities to protect the public. Although a little late in coming, S. 2848 is a mostly bipartisan bill, which if enacted could move the needle in the right direction. Let’s hope this bill gets through the House and to the President for signing without further delay.

On May 5, 2015, the Wisconsin Department of Administration (WDOA) released its Preliminary Determination that compliance with the Wisconsin water quality-based effluent limitations (WQBEL) for phosphorus will cause “substantial and widespread adverse social and economic impacts on a statewide basis”, thus providing the foundation for availability of a statewide multi-discharger variance (MDV).

What brought this on?

In posts in 2011 and 2013, I described Wisconsin’s phosphorus reduction rule, including its compliance options of water quality trading and adaptive management.Recognizing that these innovative compliance alternatives to traditional construction are not viable for all dischargers, in 2014 Wisconsin enacted legislation to authorize a statewide MDV for those dischargers that cannot meet the WQBEL for phosphorus without a major facility upgrade. Under the MDV, a point source will have more time to meet its phosphorus limitations. However, during the extended period, they will be obligated to either implement nonpoint source reductions or to provide funding to counties to implement existing, but seriously underfunded, nonpoint source reduction programs. The expectation is that most permittees will choose to fund their local county. At $50/pound for the difference between the actual pounds of phosphorus discharged and the target value of 0.2 mg/L, we are talking about real money.

The MDV legislation required the WDOA, in consultation with the Wisconsin Department of Natural Resources (WDNR), to conduct a study to:

“determine whether attaining the water quality standard for phosphorus . . . through compliance with water quality based effluent limitations by point sources that cannot achieve compliance without major facility upgrades is not feasible because it would cause substantial and widespread adverse social and economic impacts on a statewide basis.”

Based on work conducted by ARCADIS, The University of Massachusetts Donohue Institute, and Sycamore Advisors, consultants to WDOA and WDNR, the Preliminary Determination concludes that, without this variance:

·“almost 600 Wisconsin businesses will be impacted as they continue to work their way out of the recession”

·Wisconsin communities will experience a minimum cost of “$3.4 billion in capital expenditures which will rise to nearly $7 billion when accounting for interest” to meet increased capital costs

·Annual operations and maintenance (O&M) cost of $405 million along with debt service will “equate to $708 million annually”

·In 2025 when the full impact of the costs will be felt, statewide impacts will result in:

o4,517 fewer jobs

o$283.3 million in foregone wages

o$616.6 million reduction in gross state product

o11,000 fewer Wisconsin residents

A hearing on the Preliminary Determination was held on May 12, and written comments are due by June 11. The next step is for WDNR to submit a request to the United States Environmental Protection Agency (USEPA) to approve the MDV for phosphorus for Wisconsin. Once implementation of the MDV begins, much-needed nonpoint source funding can begin to flow.

Lawyers who regularly practice in the realm of the Clean Water Act (the “Act”) well know that the fight causing the most widespread panic in the regulated community for many months has been the joint proposal by EPA and the Corps of Engineers to amend the definition of “Waters of the United States.” Even though the agencies jointly withdrew the proposal on January 29, 2015, water lawyers and their clients shouldn’t let their guards down, because another inevitable regulatory slugfest is coming, and it will be over water use.

In its original form in 1972, the Act contained a concise “savings clause” that was intended to keep EPA from meddling with the authority of the States to determine how water resources will be allocated for beneficial uses. Section 510(2) simply states: “Except as expressly provided in this chapter, nothing in this chapter shall be construed as impairing or in any manner affecting any right or jurisdiction of the States with respect to the waters (including boundary waters) of such States.”

Wyoming Senator Malcolm Wallop became very concerned that the Section 510(2) “shield” wasn’t strong enough to protect the States, so he successfully led to passage in the 1977 amendments to the Act a much more robust policy statement, which was codified as Section 101(g), as follows:

It is the policy of Congress that the authority of each State to allocate quantities of water within its jurisdiction shall not be superseded, abrogated or otherwise impaired by this chapter. It is the further policy of Congress that nothing in this chapter shall be construed to supersede or abrogate rights to quantities of water which have been established by any State. Federal agencies shall co-operate with State and local agencies to develop comprehensive solutions to prevent, reduce and eliminate pollution in concert with programs for managing water resources.

On its face, the Wallop Amendment appears to be “bulletproof,” but at best it’s really just “bullet resistant.” On November 7, 1978, EPA Assistant Administrator for Water and Waste Management Thomas Jorling and General Counsel Joan Burnstein issued to all Regional Administrators an “interpretive memorandum,” which concluded that the Wallop Amendment does not absolutely prohibit legitimate use of the Act for water quality purposes, even if water rights and water usages allowed under State laws are negatively affected. While noting that Section 510(2) remained unchanged in the 1977 amendments, Jorling and Burnstein grounded their legal analysis principally in passages from Senator Wallop’s floor statement in support of his proposed amendment. Specifically, Senator Wallop acknowledged that implementation of water quality standards requirements, among other major features of the Act, might “incidentally” affect individual water rights, and that the purpose of his amendment was “to insure that State allocation systems are not subverted, and that effects on individual rights, if any, are prompted by legitimate and necessary water quality considerations.”

So, thus was born what could loosely be called the “legitimate and necessary” test for determining what is, or is not, an “incidental” effect on State-conferred water rights resulting from implementation of water quality programs arising under the Act. But, without further definition, the scope of this determination brings to mind another (and historic) subjective test – the language in the 1964 Supreme Court decision in the Jacobellis obscenity case, in which Mr. Justice Potter Stewart, in his Concurring Opinion, wrote: “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"], and perhaps I could never succeed in intelligibly doing so. But I know it when I see it….”

In 1994, the Supreme Court essentially applied the Wallop Amendment test in its P.U.D. No. 1 vs. the Washington Department of Ecology decision. There, as a condition for the issuance of a Water Quality Certification under Section 401 of the Act, the State required a proposed hydroelectric dam to pass through certain minimum flows to protect downstream fisheries. In holding for the State, the Court cited Senator Wallop’s floor statement and summarily rejected the argument that Sections 101(g) and 510(2) limit the reach of the Act to water quality issues only.

Considering the legislative history of the Wallop Amendment, the 1978 Jorling-Burnstein interpretive memorandum, and the Supreme Court’s decision in the 1994 P.U.D. No. 1 case, there is understandable angst that EPA (or anybody else, for that matter) will use one or more of the three bedrock water quality factors in Section 101(a) of the Act (i.e. chemical, physical, and biological) as offensive weapons to limit or block State water allocation proposals. Simply put, the scientific premise would be that instream ecosystems can be degraded by depleting flows below the point at which sustainability of these resources is compromised, thus causing or exacerbating a violation of the biological component of the established water quality standards at the proposed point of withdrawal. (Of course, antidegradation requirements would also be in play.)

On January 7, 2015, EPA sent to the Office of Management and Budget for regulatory review the proposed Final Rule in the recent Water Quality Standards Program rulemaking, and EPA projects that the Final Rule will be published in May 2015. To say the very least, these major changes will make even more vexing the already difficult quantity-quality, federal-state tensions over how water use allocation decisions are made at the State level.

To close this review, it must be noted that, as mentioned in the 1978 Jorling-Burnstein interpretive memorandum, some States have water allocation programs in which the impacts on water quality of a proposed withdrawal must be carefully considered. For example, in Mississippi, the statute authorizing the issuance of surface water withdrawal permits explicitly states: “No use of water shall be authorized that will impair the effect of stream standards set under the pollution control laws of this state based upon a minimum stream flow.” An appropriate case in point arose in early 2014, when a permit was sought to withdraw significant volumes of water for row crop irrigation purposes from a major stream in the Mississippi Delta. A citizens group opposed the permit proposal, contending that further withdrawals from that particular stream should not be allowed until a biological sustainability study was performed and then used as the ultimate determinant in considering applications for additional withdrawals. The citizens group and the applicant for the permit struck a compromise, but the fundamental questions about the impacts of such withdrawals on water quality remain.

Given the extended droughts in certain regions of the United States in recent years, the ever tightening laws and regulations governing both water quantity and water quality, and the reality of growing demands for water seemingly everywhere, “water wars” (both intrastate and interstate) will likely erupt more frequently as time goes by. And, in those States that have little or no statutes, regulations, and administrative procedures to work with, the fundamental questions for individuals and organizations (public and private) who want to oppose proposed water withdrawals, regardless of the intended beneficial use, will be what forum to use and what principles of law to assert. One thing is certain – seasoned water lawyers will likely see more business coming their way.

The unfortunate fact about copper mining is that it just cannot be done without impacting groundwater. This inevitable result occurs because of the massive excavations extending below groundwater elevations and the leaching of contaminants through the process of capturing copper. Most western mining states, including Arizona, have recognized this inevitable consequence and have crafted a “point of compliance” system where groundwater quality standards must be achieved at some designated point beyond the active mining site. Previously, the New Mexico Environment Department dealt with quality exceedances at active mining sites either by issuing variances from compliance requirements under the New Mexico Water Quality Act, or by simply ignoring the problem altogether. The Copper Mine Rule has been promoted as a pragmatic response to the cumbersome administrative variance procedure.

Under the New Mexico Water Quality Act, groundwater compliance must be achieved at any “place of withdrawal for present or reasonably foreseeable future use.” This jurisdictional threshold is markedly different than the jurisdictional standard for surface water discharges, which requires compliance precisely at the point of discharge into a body of surface water. The Copper Mine Rule recognizes that groundwater directly beneath an active mine site would not be available for use during the period of active mining operations and thus would not qualify as a “place of withdrawal” where groundwater standards must be met. Similar to the “point of compliance” approach taken by other states, the New Mexico Copper Mine Rule requires that groundwater standards must be achieved at monitoring well locations placed as close as practicable around the perimeter of the active mine site.

The Copper Mine Rule has been appealed by various NGOs and by the New Mexico Attorney General. The Attorney General contends on appeal that any determination of a “place of withdrawal” must be made on a case-by-case basis, rather than through a rule-making procedure. Interestingly, the Attorney General originally represented the New Mexico Water Quality Control Commission (“WQCC”) when it adopted the Copper Mine Rule, but abruptly reversed course and has lodged an appeal against the Rule for which it provided representation to the WQCC. As part of the response to the Attorney General’s appeal, the WQCC has filed a motion seeking to disqualify the Attorney General, based on a conflict of interest, from taking positions adverse to its former client. The matter is presently pending before the New Mexico Court of Appeals.

Imagine a nutrient reduction program that achieves financially manageable point source reductions while generating new cash for nonpoint source reductions, has bi-partisan support and requires no new state regulatory or fee programs. Not possible you say? Meet the Wisconsin Clean Waters, Healthy Economy Act, now codified at Wis. Stat. s. 283.16.

Now Wisconsin has another tool: a multi-discharger variance, based on a finding of statewide social and economic impact, available to dischargers that cannot meet the water quality based effluent limitation (WQBEL) for phosphorus without a major facility upgrade. Under the variance, a point source will still be required to decrease its phosphorus discharge -- meeting interim limitations of 0.8 mg/L, 0.6 mg/L, 0.5 mg/L, and the final WQBEL over four WPDES permit terms; and while doing so will make payments to the counties within its basin, providing cost-share dollars for nonpoint source phosphorus reductions. At $50/pound for the difference between the actual pounds of phosphorus discharged and the target value of 0.2 mg/L, this is expected to generate real money -- which the counties will use to implement existing, but seriously underfunded, nonpoint source reduction programs.

Because point sources have installed treatment and reduced their phosphorus discharges by 90% or more to meet Wisconsin’s prior technology-based limit of 1.0 mg/L, the remaining primary contributors of phosphorus to our waters are nonpoint sources. Yet getting funding for nonpoint source controls has been an ongoing, and largely unsuccessful, effort. For context, the Green Bay Metropolitan Sewerage District (GBMSD) currently removes about 95% of the phosphorus it receives; while the wastewater it discharges accounts for less than 3% of the total phosphorus to the lower Green Bay. With an investment of $200 million in capital improvements GBMSD could increase its removal to 98% -- a reduction of less than 2% of the total phosphorus load to the bay. Redirecting significant dollars to nonpoint source programs should be a game-changer.

The Wisconsin Department of Natural Resources (WDNR) has been reissuing WPDES permits with phosphorus WQBELs and compliance schedules based on the phosphorus reduction rule that went into effect in December 2010. The variance law went into effect on April 25, 2014, but won’t become available to WPDES permit holders until approved by USEPA. The rule package is expected to be sent to USEPA for approval in January 2015, once the statewide economic impact analysis is completed.

We have an opportunity for creative and meaningful point source and nonpoint source participation in reducing phosphorus discharges to our waters. But time is of the essence. Note to USEPA: there is much to like here – please don’t let the moment pass us by.

In a surprising turn of events, on March 12, 2014 EPA Regions 1, 3 and 9 each simultaneously but separately responded, and each in a somewhat different way, to three virtually identical NGO petitions asking those Regions to use their Clean Water Act (“CWA”) Residual Designation Authority (“RDA”) to require that stormwater discharges from impervious surfaces at existing commercial, industrial and institutional (“CII”) sites be permitted under CWA Section 402. The three petitionswere filed in July 2013 by several different and somewhat overlapping consortia of environmental organizations.

The three Regions’ responses were all signed by their respective Regional administrators, each was worded differently, and each included a somewhat similar -- yet somewhat different --explanatory enclosure that detailed the basis of each respective Region’s response.

EPA Region 3’s responseis a flat out denial of the petition, citing existing tools and programs already in place to address stormwater pollution (e.g., MS4 permits, TMDL implementation and strong state programs). The enclosure with the Regional Administrator’s letter denying the petition also states that “Region III declines to begin a process for categorical designation of discharges from CII sites to impaired waters since … the data supplied by the Petitioners to support the exercise of RDA is insufficient.” The enclosure does note that if the existing programs ultimately do not meet their objectives, alternate tools, including RDA, will need to be considered.

Similarly, EPA Region 9’s response “declines to make a Region-wide designation of the sources” in the petition specific to Region 9. That response also concludes in the enclosurethat “we currently have insufficient information to support a Region-wide designation” of the CII sites specified in the petition, “that effective programs are already in place that address the majority of the sites identified in the petition,” and that the Region will keep designation in their toolbag as they “continue to evaluate currently unregulated sources of stormwater runoff.”

However, Region 1’s responsestates that it “is neither granting the petition … nor is it denying the petition.” Instead, the Region is going to evaluateindividual watersheds in its six states to look at the nature and extent of impairment caused by stormwater, and then “to determine whether and the extent to which exercise of RDA is appropriate.”

Given the identical language in certain portions of all three of the Regional response enclosures (e.g., Statutory and Regulatory Background; Petition Review Criteria), it is clear that EPA Headquarters was in the thick of the discussions regarding the responses to these three RDA petitions. However, the apparent autonomy afforded each Region in determining how to deal with the issue is remarkable, and the discussions ultimately may have centered (as they often do at EPA HQ) on resource allocations nationally and within each Region.

The responses of Regions 3 and 9 imply that their current respective paths, with time, will get results without diverting resources. EPA Region 1 appears to more fully embrace RDA as a near-term viable tool to more aggressively control stormwater runoff from CII sites. Apparently, the New England regulators’ successful experience with the Long Creek Watershed RDA and their efforts relative to the RDA process for the Charles River has only whetted their appetite for further candidate areas at which to employ this model to address impaired stormwater.

Whether the NGOs will seek judicial relief from the denial of their Petitions, whether the states in the USA’s upper right hand corner will be supportive of EPA New England’s continued utilization of this tool, as well as how this issue ultimately will be played by EPA HQ, is fuzzy math.

EPA has touted water quality trading for more than a decade as a viable tool for combating water pollution, particularly pollution due to excess nutrients and sediment. But the Clean Water Act contains no express authority for water quality trading or offsets, and some environmental groups view trading as a “license to pollute” that violates the Clean Water Act’s promise to eliminate the discharge of pollutants into waters of the United States.

Last month a federal district court issued a final ruling in the first reported challenge to the legality of water quality trading. The court dismissed the action without reaching the legality of water quality trading. Instead, the court held that the plaintiff environmental groups (Food and Water Watch and Friends of the Earth) lacked standing and that EPA’s “authorization” of trading in the Chesapeake Bay TMDL was not a final agency action. Food and Water Watch v. EPA, No. 1:12-cv-01639 (D.D.C. decided December 13, 2013).

Although the court’s decision did not address the substantive legality of water quality trading, the case still presents four interesting aspects that may prove instructive on what to expect in future challenges.

First, environmental groups split over the question of joining the challenge to water quality trading. It is widely rumored that Food and Water Watch actively solicited support from environmental groups involved in Chesapeake Bay issue but met with stiff resistance. It appears that the other environmental groups’ support for the Chesapeake Bay TMDL overrode any interest they might otherwise have had in supporting a challenge to the legality of water quality trading.

Second, the defense of water quality trading made for strange bedfellows. Three parties intervened as defendants. One was a group representing municipal point source dischargers who support the Chesapeake Bay TMDL (National Association of Clean Water Agencies). Two were non point source groups who are actively challenging the legality of the Chesapeake Bay TMDL in another case (American Farm Bureau and National Association of Home Builders). The non-point source representatives argued that the trading component of the Bay TMDL would be important and valuable to their members if their challenge to the validity of the Bay TMDL in the other case was unsuccessful.

Third, the court’s decision on standing, ripeness, and the question of final agency action suggests it may be difficult to litigate the basic legality of water quality trading until a program is fully established and permits allowing credit for trades are issued. EPA argued successfully that no actual or imminent injury to the plaintiffs was caused by the Chesapeake Bay TMDL’s express reference to trading as a means for meeting the waste load allocations. According to this argument, the TMDL did not compel any trades; it simply acknowledged that states in the Chesapeake Bay watershed might use trading as a tool in developing permits that implement the TMDL. Carrying this argument to its logical conclusion, one could envision the possibility that there would be no basis for private party standing to challenge the legality of a trading program until after a stream has been listed as impaired, a TMDL has been performed, a trading program has been established, and permits have been issued allowing credits for trades within the program. Litigating the legality of water quality trading at such a late stage would presumably face a significant task in unwinding the momentum of such a fully developed administrative structure.

Fourth, given the success of EPA’s standing and ripeness arguments, it seems unlikely that there will be any definitive judicial ruling on the legality of water quality trading any time soon. The partisan division in Congress makes clarifying legislative action even less likely. As a consequence, EPA’s success in defending against the Food and Water Watch lawsuit may have the ironic result of postponing the day when states and permit holders will have a clear and definitive answer regarding the basic legality of water quality trading.

On September 4, 2013 EPA published proposed changes to its Water Quality Standards Rule at 40 CFR Part 131 (WQS Rule). The proposal is styled “regulatory clarifications” but the proposal represents the most significant changes made to the WQS Rule in some thirty years. The WQS Rule currently sets forth the minimum conditions that must be met in each State’s or Tribe’s water quality standards before EPA can approve them under the Clean Water Act (CWA). Increasingly over the years, state water quality standard decisions have been the driver behind required stringent permit limits in NPDES Permits, TMDLs for impaired waters and lawsuits against EPA. The proposed rule is mostly an attempt to codify exciting EPA guidance and practices to ensure national consistency and “transparency.” Many of the proposed changes were generally discussed in EPA’s Advance Notice of Proposed Rule Making (ANPRM) on water quality standards published in 1998 and many come from the Great Lakes Water Quality Guidance at 40 CFR Part 132.

First EPA is proposing to amend the use attainability analysis (UAA) requirements found in the current rule to now require a state or Tribe to identify the highest attainable use (HAU) and the water quality criteria to protect the HAU in any UAA. A UAA is a structured analysis a State or Tribe can undertake to attempt to demonstrate to EPA that the so called “fishable and swimmable” uses required under the CWA are not attainable based on a number of factors. These factors include low flows, natural or physical conditions, human caused conditions which cannot be remedied, dams, or because controls to achieve attainment would be too expensive. At least in the Northwest, EPA have been very reluctant to approve UAAs because the agency has a “rebuttable presumption” that fishable uses and swimmable uses are attainable (some might call it an irrebuttable presumption) and implicitly that it is never too expensive to remedy water quality problems. Requiring states and Tribes to also adopt a new HAU in connection with a UAA along with associated criteria may make the UAA an even less viable CWA off-ramp.

Speaking of off-ramps, the proposed rule also sets forth the conditions under which a state or Tribe can adopt “variances” to water quality standards for individual or groups of NPDES permittees. Variances are merely referenced in the current WQS Rule and have been viewed as a “UAA lite.” Variances are codified in water quality standards (subject to approval by EPA) and allow individual dischargers or groups of NPDES Permits to temporarily exceed water quality based effluent limits based on the same factors which justify a UAA. EPA articulates in the proposal that it believes variances have been underutilized and therefore sets forth the conditions which the Agency will grant variances for an individual or groups of NPDES permittees. (e.g. Demonstrate temporary unattainability, maximum timeline of 10 years and protect the HAU during the variance.) Whether the proposal will lead to more variances may be doubtful. EPA has typically been unwilling to approve variances for industrial or commercial dischargers (although they are more flexible with municipalities) because pollution controls to meet WQS are seemingly never too expensive.

As my colleague Patricia Barmeyer notes in her recent post, the proposed rule also proposes changes to antidegradation implementation procedures that are somewhat consistent with current practices and guidance by providing some flexibility in how states protect high quality waters and a specific requirement that states must first require dischargers to implement “practicable” pollution controls that minimize or eliminate any degradation to high quality before allowing the discharge. “Practicable” is not defined but if this term is implemented in the same way as proving economic hardship in a UAA or variance then new and increased discharges could be subject to additional (and expensive) hurdles in going through antidegradation reviews. Finally, the proposed rule addresses compliance schedules in NPDES permits consistent with current practice and specifies the conditions under which the EPA Administrator will make determinations that a water quality standard does not meet the requirements of the CWA. Comments on the proposed rule are due on December 3, 2013 (unless an extension is granted).

On September 13, in a 99 page decision, the U.S. District Court for the Middle District of Pennsylvania upheld EPA’s multi-state Clean Water Act Total Maximum Daily Load (“TMDL”) for the Chesapeake Bay and its tributaries against a broad range of challenges brought by the American Farm Bureau Federation and six other farm industry trade associations. Six environmental organizations led by the Chesapeake Bay Foundation, plus four municipal water associations led by the National Association of Clean Water Agencies, intervened in support of EPA.

The Chesapeake Bay TMDL is not the first to cover multiple states, but it is by far the largest, covering 64,000 square miles in Maryland, Virginia, Delaware, Pennsylvania, West Virginia, New York and the District of Columbia. It requires substantial reductions of nitrogen (25%), phosphorus (24%) and sediment (20%) by 2025 to meet water quality standards. Because of the interstate nature of the long-standing pollution problems, after more than two decades of collaborative but unsuccessful efforts, the states agreed in 2007 that EPA should develop the TMDL. It was issued in 2010 and included allocations for each of 92 tidal segments which, after consultation with the states, were further allocated among states, watersheds and sectors (such as agriculture, wastewater, stormwater, etc). During the process, each state developed its own Watershed Implementation Plan (“WIP”), specifying wasteload allocations (“WLA’s”) for point sources, load allocations (“LAs”) for nonpoint sources, and identifying the regulations, programs and resources that would be used to achieve the required reductions. For more on this TMDL see "EPA Issues Biggest TMDL Ever for Chesapeake Bay Watershed" and ELI Environmental Forum “The Chesapeake Bay TMDL” (May/June 2011).

The plaintiffs alleged that (1) the TMDL was an unauthorized “implementation” of allocations by EPA, (2) requiring WIPs exceeded EPA’s authority, (3) EPA’s use of watershed and related models in setting the allocations was an abuse of discretion, and (4) there was insufficient public notice. In addressing these challenges, the court first held (as several others have) that a TMDL is not self-implementing, but is an “informational tool”, developed collaboratively by EPA and the states under CWA Section 303(d), and implemented primarily by the states.

Turning to the merits, the court upheld EPA’s definition of a TMDL for a waterbody or segment as the sum of all WLAs and LAs plus natural background. It also upheld EPA’s authority to establish a multi-state TMDL, when the affected states either fail to do so or ask EPA to do it (both occurred here), including limitations on sources in upstream states to achieve compliance with water quality standards in downstream states. It held that EPA’s “holistic” or “watershed-wide approach” was consistent with the broad national goals of the CWA to “restore … our Nation’s waters.” In reaching this result the court emphasized the collaborative efforts of the Bay states and EPA starting in 1983 to address the problems of interstate pollution, transported by rivers and tides, and their consensus that an EPA-led multistate effort was needed.

The court further held that the WIPs – new tools in the TMDL context – were authorized as part of the “continuing planning process” under CWA Section 303(e). This process is initiated by the states to achieve water quality goals, and is subject to review and approval by EPA. Because EPA had advised the states in letters what it expected in terms of general content and specificity in the WIPs, but left the details to the states, the court held EPA did not exceed its authority. The court also relied on CWA Section 117(g) - a Chesapeake Bay-specific provision - requiring EPA to “ensure that management plans are developed and implementation is begun by [all the affected states] to achieve and maintain…” the applicable water quality goals.

The plaintiffs also challenged EPA’s requirement that each WIP contain “reasonable assurances” of timely and effective implementation, and EPA’s use of “backstop” allocations where EPA determined that a WIP provision was deficient. “Backstops” involved requiring NPDES permits from previously unregulated sources. The court held that EPA could properly require “reasonable assurance” under CWA 303(d)(1), which requires a TMDL must be “established at a level necessary to implement the applicable water quality standards.” The court upheld “backstops”, which were only used in 3 instances, as a reasonable exercise of EPA’s authority under CWA 303(d)(2) to ensure that the contents of the TMDL are designed to achieve the applicable water quality goals.

The court upheld EPA’s use of models as scientifically supported and within EPA’s discretion. It rejected the challenge to adequate notice and opportunity for public participation since (1) a 45 day public comment period had been provided, (2) there had been hundreds of public meetings during the more than 10 year development of the TMDL, and (3) plaintiffs showed no prejudice from the fact that some details of the modeling were not available until after the comment period.

The court held that TMDL establishment and implementation involves “cooperative federalism” between the states and EPA, and that the Chesapeake Bay TMDL properly reflects the shared responsibilities and necessary interactions, despite some bumps along the road. While EPA exerted strong leadership, the court held that it did not unlawfully usurp the states’ implementation functions. The court noted the preserved authority of the states to implement nutrient trading and offsets, and to set or revise source-specific loading allocations. In conclusion, there is a lot of thoughtful analysis, as well as precedent, in this decision, which makes it an excellent resource for CWA practitioners.

On April 23, a panel of the D.C. Circuit unanimously held in Mingo Logan Coal Co. v. EPA that the Clean Water Act gives EPA the authority to withdraw permits previously granted under section 404 of the Act. The case emerged from EPA’s determination that the discharge of mining waste from the Spruce No. 1 mine in West Virginia into certain streams and tributaries would have an unacceptable adverse effect on environmental resources. Based on this determination, EPA withdrew the Army Corps of Engineers’ prior specification of these streams and tributaries as disposal sites for the waste from mountaintop removal.

Several features of the case are striking. First, the decision has obvious – and obviously important – implications for the ongoing debate over mountaintop removal and its irredeemable environmental impacts. No longer can the argument be made that a permit, once issued, gives the permittee the power, in perpetuity, to blast the tops off of mountains and dump them into streams.

Second, the decision rested, for the most part, on a single word: “whenever.” The Clean Water Act states that the Administrator of the EPA may withdraw the specification of a disposal site for dredge-and-fill material “whenever” she determines that it will have an “unacceptable adverse impact” on certain environmental resources. The court took Congress, literally, at its word, and held that “whenever” means whenever – that is, even if EPA finds unacceptable adverse impacts after a permit has issued, the agency has the authority to pull the permit.

Third, as if to make certain its own holding is unambiguous, too, the court five times stated that the Clean Water Act unambiguously authorizes EPA to withdraw permits after they are issued. EPA’s current interpretation of the Act is thus not changeable by a future administration.

Should permittees fear that “whenever” will become wherever? It is worth remembering that EPA’s decision on the Spruce No. 1 mine was the first time EPA had – ever! – withdrawn a previously issued permit, in the 40-year history of the Clean Water Act. Whether EPA will be emboldened by this decision, or will continue to mostly allow existing permits to stand, remains to be seen.

On January 3, 2013, the District Court for the Eastern District of Virginia ruled that EPA lacks the statutory authority to set a Clean Water Act (“CWA”) total maximum daily load (“TMDL”) for “stormwater flow rates” as a surrogate for sediment deposition. Virginia Dep’t of Transportation et al v EPA et al. EPA has decided not to appeal. The case has received national attention because of its implications for other TMDLs that use surrogates. This article will discuss the decision and its significance for the TMDL and water quality regulatory regime.

The relevant statutory framework is CWA Section 303, under which each state establishes water quality standards for waters within its boundaries. These consist of a designated use (trout fishing, contact recreation, etc.) and numerical or narrative “water quality criteria” necessary to support that use. For “impaired waters” where the criteria are not being met, the state must set a TMDL (think “pollution budget”) for each pollutant for which the criteria are exceeded, and implement a “planning process” leading to achievement. Where the state fails to act, or sets a TMDL which EPA regards as insufficient, CWA Section 303(d)(2) directs EPA to set the TMDL.

Accotink Creek is a 25 mile tributary to the Potomac River in Virginia, in which the benthic organisms were impaired, primarily because of sediment deposited by stormwater running off impervious urban and suburban areas. In April 2011, after Virginia failed to set a TMDL, EPA set one which limited the flow rate of stormwater into Accotink Creek to 681.8 cu ft/ acre-day. The court said that the parties agreed that “sediment is a pollutant, and that stormwater is not” (Slip op. 3). While EPA’s brief contains a fallback argument that stormwater can be viewed as a “pollutant”, it did not dispute that stormwater flow was being used as a surrogate for sediment. Thus the question addressed by the court was whether EPA has the statutory authority to set a TMDL for a “surrogate” which is not itself a “pollutant”.

EPA has used surrogates in a number of circumstances where, in its view, the surrogate would provide appropriate reduction of pollutants, and would be either easier to measure or provide other benefits (such as, in this case, reduction of stream bank scouring caused by heavy stormwater discharges), or both. The court rejected EPA’s argument that since the CWA does not expressly address the use of surrogates, EPA’s use of them should be upheld as reasonable “gap-filling”, consistent with the broad remedial objectives of the CWA, and entitled to substantial Chevron step 2 deference. The court held instead that because the CWA instructed EPA to set TMDLs for “pollutants”, not “surrogates”, the statute was clear. The court distinguished EPA’s use of surrogates in this case from other instances in which surrogates have been used under other CWA provisions (notably Sections 301, 304 and 402) where EPA appears to have greater latitude.

EPA and states have used stormwater surrogates in TMDLs in Connecticut, Missouri and North Carolina. They have also used other types of surrogates, such as impervious surface area limits and secchi disc readings. Some of those have been challenged, and this decision will no doubt provide ammunition for those who oppose their use. Nationally, however, this amounts to a very small percentage of the TMDLs that are in place, even if one focuses only on sediment (for which, the court noted, EPA has issued approximately 3700 TMDLs).

In addition, this ruling will have no effect whatever on EPA’s permitting of industrial and municipal stormwater discharges, including municipal separate storm sewer systems (“MS4s”), or its ongoing development of stormwater regulations, because these activities are expressly authorized under CWA Section 402(p). This is especially important, because EPA and many states now recognize stormwater as a major source of contamination and water quality impairment. For a thoughtful article on this subject and emerging approaches, see Dave Owen,Urbanization, Water Quality, and the Regulated Landscape, 82 U. of Colo. L. Rev. 431 (April 2011).

After decades of sparring over nutrient loading in the Illinois River, and following several short term extensions of a previous truce, Arkansas and Oklahoma recently executed an agreement, the “Second Statement of Joint Principles and Actions”, that establishes a procedural framework for attempting to resolve their long running trans-boundary water quality dispute.

The Illinois River heads up in a rapidly developing section of Northwest Arkansas and flows west into a comparatively undeveloped portion of Northeast Oklahoma, where the river is designated by state statute as a scenic river. For more than two decades Oklahoma has worked to reduce the amount of nutrients, and particularly phosphorus, discharged into the Illinois River watershed. In 2002 Oklahoma adopted a numeric water quality criterion for Total Phosphorus that many considered impossible to attain in a developed watershed. In an effort to avoid litigation over the validity of the numeric criterion, Arkansas and Oklahoma entered into an agreement in 2003 known as the Statement of Joint Principles and Actions. This agreement provided, among other things, that: (i) Oklahoma would postpone for 10 years the date on which the numeric criterion would be fully effective; (ii) Arkansas sources would take a number of steps to reduce phosphorus discharges; and (iii) Oklahoma would review the existing numeric criterion, with an opportunity for Arkansas representatives to participate, before the end of the ten year period to determine whether the numeric criterion should be changed.

The ten year truce created by the Statement of Joint Principles and Actions was originally scheduled to expire in July 2012. During the ten year period Arkansas sources made significant progress in reducing the amount of phosphorus they discharged in the watershed. As a result, phosphorus levels in the Illinois River began to decline and most observers agreed that conditions in the river were significantly improved. Towards the end of the ten year period Oklahoma undertook a review, with full participation by representatives of Arkansas, EPA, and the Cherokee Nation. The review ended in a sharply divided report, with Oklahoma representatives stating that no change in the numeric phosphorus criterion was warranted and Arkansas representative stating that significant change was necessary.

As the end of the ten year truce approached, officials from Arkansas and Oklahoma began negotiations once again on how to avoid litigation. Focus on the potential for costly litigation was sharpened by the fact that EPA had publicly commenced work on a Phosphorus TMDL for the entire Illinois River watershed. After several agreements on short term extensions of the July 2012 deadline, Arkansas and Oklahoma reached agreement in February 2013 on a Second Statement of Joint Principles and Actions. This new agreement provides, among other things, that Arkansas and Oklahoma will fund a joint three year water quality study using EPA protocols to determine the threshold Total Phosphorus levels at which shifts in algal species or biomass production occur that result in undesirable aesthetic or water quality conditions. Oklahoma and Arkansas agree in the Second Statement to be bound by the findings of the joint study, and Oklahoma agrees to adopt a new numeric criterion for Total Phosphorus in the Illinois River if the results of the joint study are significantly different from the existing criterion (i.e., more than -0.010 mg/l or +0.010 mg/l than the existing .037 mg/l criterion). During the term of the Second Statement of Joint Principles and Actions, both states agree not to initiate or maintain litigation contrary to the terms of the agreement, and the statute of limitations on all claims is extended. Oklahoma agrees that it will postpone for the duration of the new agreement the date on which its existing, hotly disputed numeric criterion is to be fully effective.

EPA was not a party to the negotiation of the new agreement and it has not announced any formal position on its effect. It is not clear what impact the new agreement will have on EPA’s work to develop a TMDL for Phosphorus in the Illinois River watershed or on the various NPDES permits for POTWs on the Illinois River that are currently pending review in EPA Region 6.

I get it that environmental groups place strict compliance with regulatory controls at a premium. After all, the standards are designed to be protective of the resource, and they are The Law, which must be obeyed.

But I sometimes find it dismaying when people conflate immediate, measured, and guaranteed compliance with ecological outcomes. They are not the same. I have been in settlement discussions in which I propose that we first come to agreement on what’s best for the resource, and then figure out how to make that fit into the regulatory framework, but have had few takers. The number is the number is the number.

A recent example arises in the context of water quality trading. EPA policy promotes alternative means of achieving regulatory compliance that promise environmental results at least as good as conventional, engineered approaches, and at lower cost. For example, if discharge water temperatures are the problem, riparian shade tree planting could substitute for mechanical chillers. Of course, measureable cooling would be deferred by many years while the trees grow, but the ancillary benefits of watershed restoration to habitat and ecosystem function are intuitive and compelling. This approach is supported by academia, government, and many in the NGO community. Some though are skeptical.

The City of Medford, Oregon, is embarking on a riparian vegetation approach to reduce temperatures at its wastewater treatment outfall, in full cooperation with Oregon DEQ. A regional NGO, Northwest Environmental Advocates, however, has raised objections. In a letter dated March 15, 2013, NEA asks EPA to examine DEQ’s implementation of the water quality trading policy with reference to Medford. NEA questions allowance of “credits” for watershed restoration work that upstream nonpoint sources would have to do anyway, and asserts that no credits should be allowed until the new trees actually yield shade.

The problem is that the upstream nonpoint sources are not obligated by law to restore riparian vegetation; they just need to adopt best management practices to avoid further degradation. More to the point, restoration of the watershed will simply not occur without the funding provided by a point source with a regulatory problem to solve, such as Medford. By denying the City credits, the incentive to use a watershed approach disappears. Similarly, if no credits are awarded until the trees are grown, funds that could go toward watershed restoration will be diverted to engineered controls on temperature. As DEQ Director Dick Pedersen so aptly puts it, “[i]f we ever build a chiller at the expense of ecosystems, we’ve failed.”

Courts in Alaska issued two decisions upholding agency practice in carrying out antidegradation review under the Clean Water Act. The federal court concluded that adoption of water quality standards does not, itself, require antidegradation review. In the second case, a state court concluded that guidance may be developed to implement antidegradation regulations and need not be promulgated as a regulation provided it does not contain substantive criteria.

In Native Village of Point Hope v. U.S. Environmental Protection Agency, Alaska native and environmental organizations challenged EPA's approval of the State of Alaska's adoption of a site-specific water quality criterion ("SSC") for total dissolved solids ("TDS"). The SSC was challenged on a number of grounds, including on the basis that neither the State of Alaska nor EPA analyzed the SSC under the relevant antidegradation policy. The issue before the U.S. District Court for Alaska was whether antidegradation review applied to the adoption of water quality standards ("WQS") or, conversely, only when WQS are translated into permits through effluent limitations. In a case of first impression in the federal courts, the court ruled for EPA, holding that agencies are not required to undertake antidegradation review for the adoption of WQS; the obligation is only triggered when a WQS is incorporated into a permit through effluent limitations.

In Alaska Center for the Environment v. State of Alaska, environmental organizations challenged the State of Alaska's adoption of antidegradation implementation procedures through guidance, arguing that the procedures should have been promulgated as regulations. As background, several NPDES permits in Alaska were withdrawn by EPA in the face of arguments from environmental organizations that the State of Alaska lacked antidegradation implementation procedures. To address this alleged deficiency, the State of Alaska developed a guidance document which EPA found was consistent with EPA's own antidegradation regulation. The primary issue in the litigation was whether the State of Alaska was required to promulgate the guidance in the form of a regulation or whether it was permissible rely upon guidance to implement its regulations. In a decision that turned largely on the State of Alaska's Administration Procedures Act, the court held that it was appropriate for the State to develop the guidance to implement its regulatory program, reasoning that the guidance did not add substantive requirements to existing regulations.

On Monday, EPA lost another battle in the war over guidance. In Iowa League of Cities v. EPA, the 8th Circuit Court of Appeals vacated two letters that EPA had sent to Senator Charles Grassley concerning biological mixing zones and bypass of secondary treatment units at POTWs (also referred to as “blending”, because the POTWs blend wastewater that has not be subject to biological secondary treatment with wastewater that has, prior to discharge). The Court concluded that both letters constituted promulgation by EPA of effluent limits under the Clean Water Act and that they constituted legislative, rather than interpretive rules (I refuse to refer to “interpretative” rules; sorry). As a result, the Court vacated the letters due to EPA’s failure to follow notice and comment requirements applicable to promulgation of legislative rules. Finally, the Court concluded that a duly promulgated rule concerning biological mixing zones might be valid under Chevron, but that a rule barring bypasses of secondary treatment would exceed EPA’s authority under the Clean Water Act.

In first determining whether the letters constituted “promulgation” of an effluent standard, the Court looked to whether the letters were binding on the regulated community. Relying in part on Appalachian Power Co., the Court concluded that the letters were binding:

If an agency acts as if a document issued at headquarters is controlling in the field, if it treats the document in the same manner as it treats a legislative rule, if it bases enforcement actions on the policies or interpretations formulated in the document, if it leads private parties or State permitting authorities to believe that it will declare permits invalid unless they comply with the terms of the document, then the agency’s document is for all practical purposes “binding.”

As the Court noted with respect to the mixing zone issue, the “letter instructs state permitting authorities to reject certain permit applications, regardless of the state’s water quality standards.” With respect to the bypass issue, EPA stated that “it will insist State and local authorities comply with” a never-issued policy that precludes the types of bypass at issue. To try to suggest that words such as “insist” are not binding did not go over well with the Court. “Just as it did in Appalachian Power, the EPA dissembles by describing the contested policy as subject to change.”

After concluding that the letters constituted promulgation of effluent standards, the Court went on to conclude that the letters constituted legislative, rather than interpretive, rules, and thus were subject to notice and comment rulemaking. The following is the key paragraph for those of us attempting to beat back the kudzu that is EPA’s reliance on such informal guidance as a substitute for notice and comment rulemaking:

Identifying where a contested rule lies on the sometimes murky spectrum between legislative rules and interpretative rules can be a difficult task, but it is not just an exercise in hair-splitting formalism. As agencies expand on the often broad language of their enabling statutes by issuing layer upon layer of guidance documents and interpretive memoranda, formerly flexible strata may ossify into rule-like rigidity. An agency potentially can avoid judicial review through the tyranny of small decisions. Notice and comment procedures secure the values of government transparency and public participation, compelling us to agree with the suggestion that “[t]he APA’s notice and comment exemptions must be narrowly construed.”

“Layer upon layer of guidance.” The “tyranny of small decisions.” I couldn’t have said it better myself.

The Clean Water Act requires states, as well as Indian tribes, to review their water quality standards every three years. The water quality standards include narrative and numeric criteria that differ based on the type of use designation for the particular stream. Use designations include warmwater aquatic habitat, cold water aquatic habitat, primary and secondary contact recreation and others. The Kentucky Division of Water has been engaged in the triennial review of the state’s water quality standards since early 2012. In the latest development, the agency asked the legislative committee that reviews agency regulations to defer consideration of the rules for another month while the agency takes comment on a change to the state’s standard for selenium.

The Kentucky regulations address a number of changes to the water quality standards and included proposed deletion of the acute water quality criterion for selenium. The proposal to delete the acute standard was based on findings that the current state standard, which was derived from USEPA guidance, was not based on sound science. USEPA Region 4 commented on the proposed deletion and identified three options: (1) leave the current acute criterion in place and wait for release of any revisions to USEPA’s selenium criteria, (2) adopt the acute criterion from USEPA’s current national guidance, or (3) adopt an alternate criterion based on other scientifically defensible guidance.

In response, the Division conducted a survey of recent studies of selenium toxicity to aquatic species and determined that it was appropriate to develop state-specific water quality criteria for selenium. The agency is proposing an acute criterion for warmwater aquatic habitat of 258 ug/L, with an alternate calculation option depending on the sulfate concentration that is present. The proposed chronic criterion for warmwater aquatic habitat is 8.6 ug/g (dry weight) of whole fish tissue or 19.2 ug/g (dry weight) of fish egg/ovary tissue. The analysis of fish tissue is triggered when the water column concentration of selenium exceeds 5.0 ug/L. If the water column result is less than or equal to 5.0 ug/L, the water body is meeting is aquatic life uses. If the water column result is greater than 5.0 ug/L, then the next step is to determine whether the site is attaining the fish tissue or egg/ovary tissue criterion.

Stay tuned as interested parties weigh in on the state’s proposed action.

In December 2010, the Wisconsin Department of Natural Resources (WDNR) put into place new rules to control phosphorus discharges. Adaptive management is one of four compliance options allowed under these new rules. But what is “adaptive management”?

WDNR developed adaptive management to provide permittees with a less expensive, more flexible compliance option, and describes adaptive management this way:

“a phosphorus compliance option that allows point and nonpoint sources (e.g., agricultural producers, storm water utilities, developers) to work together to improve water quality in those waters not meeting phosphorus water quality standards. This option recognizes that the excess phosphorus accumulating in our lakes and rivers comes from a variety of sources, and that reductions in both point and nonpoint sources are frequently needed to achieve water quality goals. By working in their watershed with landowners, municipalities, and counties to target sources of phosphorus runoff, point sources can minimize their overall investment while helping achieve compliance with water quality-based criteria and improve water quality.”

To be “eligible” to use adaptive management, a permittee must discharge to a water body that is exceeding its in-stream phosphorus criteria on which at least 50% of the total phosphorus loading comes from nonpoint sources, and would have to implement filtration or an equivalent technology to meet the new phosphorus limit. Unlike water quality trading, which measures compliance with an end-of-pipe effluent limitation, the adaptive management permittee must meet an in-stream concentration of acceptable phosphorus. Under adaptive management, the phosphorus in the effluent may be reduced over a longer period of time – in some instances, up to several WPDES Permit cycles – as compared to water quality trading which requires the credits to be generated before the permit is issued. The job of identifying and finding partners falls to the permittee; WDNR does not intend to act as a broker to identify and bring prospective partners together.

An innovative alternative that seeks a watershed approach to control phosphorus, encourages nontraditional partnerships and cooperation between point and nonpoint sources, tries to provide flexibility in timing and doesn’t rely on the traditional and expensive construction of new treatment facilities – how’s it going so far?

For much of industry, forging such partnerships with other regulated and unregulated sources is unfamiliar territory and relying on those other entities to fulfill their commitments when the industrial permittee is the one that must demonstrate compliance is too uncertain to be acceptable. Many municipalities are more comfortable with partnerships of this sort, but the early experience of one environmentally proactive municipality has demonstrated the enormous amount of time and effort required to take on the role of “champion”, educate and engage other partners in the watershed. Agricultural interests are initially skeptical – concerned with the potential of taking land out of production. The environmental advocacy community reaction is mixed. One ENGO is actively working with the municipality to educate and engage partners and has written a guidance document on how to do adaptive management. Another ENGO has filed suit against WDNR over WPDES Permits issued with adaptive management compliance schedules in them, reinforcing the reluctance of industrial and municipal permittees to commit to this approach. And after approving WDNR’s rules in the first instance, EPA now takes such a strict reading of the rules that the intended flexibility may become illusory.

The Clean Water Act’s antidegradation rule has been a fertile ground for dispute and litigation in Georgia, as elsewhere. A recent decision by the Georgia Court of Appeals, Upper Chattahoochee Riverkeeper, Inc. v. Forsyth County, 734 S.E 2d 242 (Ga. App. 2012), has interpreted the Georgia version of the Rule and provided some clarity for POTWs and others seeking NPDES effluent limits.

Georgia’s Antideg Rule is identical to the federal rule and provides that in the case of a proposed discharge to high quality waters, that quality shall be maintained unless allowing lower water quality is “necessary to accommodate important economic or social development,” and water quality to protect existing uses is assured.

The Rule is not a model of clarity, to say the least, and has been subject to varying interpretations. EPA has chosen not to provide more specific direction and has, on multiple occasions, reiterated that it is up to the States to decide how to interpret and apply the Antideg Rule, through each State’s implementation procedures.

Georgia EPD’s implementation procedures interpret the rule to require a determination whether the proposed new or expanded discharge is “necessary to accommodate important economic or social development….” If it is determined the discharge is “necessary,” that is, that a no-discharge alternative is not economically feasible, then EPD proceeds to consider the application and to impose permit conditions based on the applicable technology-based standards and in-stream water quality standards.

In contrast, the environmental groups, and an Administrative Law Judge, have taken the position that the Antideg Rule requires EPD to consider whether “allowing the lower water quality resulting from the permitted discharge is actually necessary.” That reading led the ALJ to conclude that, without regard to cost or benefit, the permit limits for the POTW must be set at the lowest level that is technologically feasible, so long as the permittee can afford it. As interpreted by the ALJ, the antidegradation analysis would be not just the beginning of the analysis of a proposed new discharge, but also the end point. According to that view, the antideg analysis would ask, not just whether the discharge is justified, but also, what is the lowest limit that is feasible. Application of the Antideg Rule in this fashion would short-circuit all considerations of in-stream water quality standards and technology-based limits. It would eliminate any distinction between POTWs and industrial facilities -- they both would have to meet the lowest limit that is technologically feasible that they can afford.

The Georgia Court of Appeals has now agreed with EPD’s reading of the Antideg Rule. The court held the rule requires only a determination whether lower water quality generally is necessary to accommodate economic or social development, not a permit-specific analysis of whether the exact effluent limits in the permit are necessary. The opponents to the permit have asked the Georgia Supreme Court to take up the issue; a decision on the petition for certiorari is expected by mid-2013.

On January 8, 2013, the U. S. Supreme Court unanimously held that flow from an improved portion of a waterway into an unimproved portion of the same waterway—even if polluted—does not qualify as “discharge of pollutants” under the Clean Water Act (CWA). Although this case arises in the context of a municipal separate storm sewer system (MS4), it has major implications for dam owners everywhere. The case reaffirms evolving doctrine that dams are not point sources requiring National Pollutant Discharge Elimination (NPDES) permits per Section 402 of the CWA.

In Los Angeles County Flood Control District v. Natural Resources Defense Council, environmental groups brought a CWA citizen suit against the District for violating the terms of the District’s NPDES permit to operate the MS4 facilities. It was undisputed that water quality standards had repeatedly been exceeded for a range of pollutants, as measured at the District’s monitoring stations in the Los Angeles and San Gabriel Rivers. The District collected storm water in concrete channels before discharging back to the river, and the monitoring stations were within the concrete channels. It was also undisputed that many other upstream parties contributed to the contamination.

Plaintiffs argued that since the monitoring stations were within the control of the District, the District had responsibility for meeting standards. But that was not the issue for the Court. Instead, the Court focused on whether a “discharge of pollutants” occurs when polluted water flows from one portion of a river, through an engineered improvement, and then back again to the same river. The Court answered in the negative, citing its 2004 decision in South Fla. Water Management Dist., v Miccosukee Tribe. In Miccosukee, the Court held that pumping polluted water from one part of a water body to another part of the same water body is not a discharge of pollutants.

This decision should come as welcome news to dam and hydroelectric plant owners. Prior to Miccosukee and now LA County, the federal Courts of Appeal simply deferred to EPA judgment as to whether a dam could be said to “add” pollutants originating upstream when it passes them through penstocks or spillways to the river below. The Supreme Court, however, has firmly established a rule of law that CWA Section 402 is implicated only where the upstream and downstream river segments are “meaningfully distinct water bodies,” a condition that will rarely exist for in-river dams.

Tremendous progress has been made in protecting and restoring the environment over the past 40 years since the passage of major legislation at the federal, state, and provincial levels in the United States and Canada. However, our skill at measuring that progress is somewhat limited, and we may not have the kind of information we need to judge the health of our ecosystems or the effectiveness of our programs. There have been some good efforts on an international, national, state, and provincial basis to evaluate the state of the environment using certain indicators, but one area needing much more attention is the Great Lakes.

Although there are many indicators monitored on a continuing basis in the Great Lakes, the real difficulty has been synthesizing the information in a way that puts officials in a position to communicate effectively with the public, policy makers, and managers about whether the Great Lakes are getting better, worse, or staying the same. The International Joint Commission (IJC) initiated an effort recently through its Water Quality Board (WQB) and Science Advisory Board (SAB) to identify a limited number of core indicators for this freshwater resource. What’s needed now is a consensus among the scientific and policy leaders on the Great Lakes on the “few indicators that tell us the most” about the waters.

It was not hard to tell the Great Lakes were in trouble when enough dead alewives washed up on its shores requiring front end loaders to remove them, the Cuyahoga River and other tributaries caught fire, and Lake Eric was declared “dead” because of massive algal blooms. Many of these conditions on the Great Lakes led to both a public outcry and Congressional action in order to deal with the lakes’ water pollution and other environmental problems. As programs were put in place to keep oil out of the rivers and reduce nutrient loadings to the lakes, significant visible improvements were seen. The underlying data was available to support the observations, but the visible improvements plus much better fishing success told the story in an easily observable way.

Things are much more complicated now. When looking at the fundamental three legged stool supporting the Great Lakes’ ecosystem, being the chemical, physical, biological integrity of the resource, it is not easy to gage. With regard to chemicals, very low concentrations of legacy pollutants like PCBs and dioxins can cause serious problems. Likewise, ongoing contamination from airborne deposition of mercury is a real concern. New chemicals such as flame retardants are the next problem area with which to deal. Invasive species such as the zebra and quagga mussels, the ever present sea lampreys, and the threat from the Asian carp are a constant problem for maintaining the biological balance in the system. From a physical standpoint, expanding urbanization, suburban sprawl, and the manifestations of climate change are also adding tremendous pressure on the Great Lakes. What’s needed is a core set of chemical, physical, and biological indicators of the health of the ecosystem and the effectiveness of the programs to protect and restore it.

Good progress is being made on this front. After several months of work by some of the top Great Lakes’ scientists and policy makers, a group of just over twenty indicators has been preliminarily identified, with a smaller group as the core. They include: Physical: Coastal wetlands, land cover, and tributary physical integrityChemical: Nutrient concentrations and loadings, and persistent bio - accumulative toxicsBiological: Lower food web productivity/health, fish species of interest, harmful and nuisance algae, aquatic invasive species

Much of the foundation for the work done recently comes from what is known as the State of the Lakes Ecosystem Conference (SOLEC), which is a large gathering, primarily of scientists, held every two years to review and evaluate a large number of Great Lakes’ indicators on the Great Lakes.

What needs to happen next is for the IJC first to adopt a set of core indicators as the ones that tell us the most about the resource, then inform the U.S. and Canadian governments of its findings. Under the recently updated Great Lakes Water Quality Agreement, the parties are responsible for establishing ecosystem indicators for the Great Lakes.

With a set of core indicators, both countries will be in a much better position to communicate with the public, elected officials, and managers about the health of the ecosystem and the effectiveness of programs. In addition, our governments will be in a position to make better choices about the allocation of increasingly scarce resources to maximize the return on investment for improving the health of the Great Lakes, the largest, surface freshwater system in the world.

As the Clean Water Act celebrates its 40th anniversary, it has ignited a controversy in New Hampshire with potentially hundreds of millions of dollars at stake. In the law’s early days, publicly owned treatment works (“POTWs”), mandated and financed in large part with federal funds, were viewed as the “good guys” in the national effort to restore quality in receiving water bodies into which raw sewage was being discharged. That view of POTWs seems to have changed in New Hampshire, at least as relates to the State’s largest saltwater estuary; the Great Bay. Faced with the potential need to finance significant POTW upgrades or reconstruction, New Hampshire POTWs are challenging EPA’s permitting decisions in the courts, through administrative channels and in the press.

As we know, POTWs are regulated through National Pollutant Discharge Elimination System (“NPDES”) permits that monitor and control a variety of effluent criteria. Interestingly, however, New Hampshire was and remains one of the few states that has not obtained authority to issue new and renewed NPDES permits. Because of this status as a non-delegated state, dischargers in New Hampshire with expiring permits must apply to the federal government for renewal. As environmental regulation has progressed, however, and as federal funds have diminished or disappeared, POTWs and the towns and sewer districts that operate them have found themselves opposed to the EPA’s efforts to impose stricter standards to address pollutants that were not of primary concern when the POTWs were constructed and initially permitted.

In New Hampshire, this is seen vividly in NPDES renewal efforts EPA is undertaking for several POTWs that discharge under expired and expiring permits, directly or indirectly, into the Great Bay estuary located on the State’s coast. Once a rich habitat for oysters, eel grass and other sea life, Great Bay is now stressed by a variety of factors including both point and non-point discharges as well as other environmental factors. At the heart of the controversy in New Hampshire is EPA’s intention to reduce effluent limitations for nitrogen to as low as three parts per million (the limits of technology) in order to ameliorate nitrogen related problems in Great Bay. From the municipalities and POTWs perspective, the costs to comply with these new lower limits are exorbitant. One widely cited study estimates that, for the Great Bay estuary POTWs to comply with the new nitrogen limit, it will cost in excess of one half billion dollars in capital,operation and maintenance expenses. Those costs will, of course, be passed along to a relatively small population of ratepayers.

A coalition of communities with affected POTWs has joined forces in response, proposing “adaptive management programs” combining somewhat lower discharge limits with comprehensive non-point controls aimed together at achieving EPA’s stated goals. It is unclear at this time whether those efforts will be successful. The coalition communities certainly have in mind the experiences in Chesapeake Bay, or closer to home in neighboring and similarly non-delegated Massachusetts, where EPA is using its Residual Designation Authority (“RDA”) to require permits in the Charles River watershed. EPA has been public with its view that the Charles River RDA program may become a model for watersheds elsewhere in New England and nationwide. It is thought that an adaptive management program as proposed by New Hampshire’s coalition communities would obviate the need to utilize RDA for Great Bay, but that issue remains to be addressed in the future.

On March 13, 2012, eleven environmental organizations, led by Gulf Restoration Network ("GRN"), fileda federal Clean Water Act (CWA) citizen suit which demanded that the U.S. Environmental ProtectionAgency (EPA) set federal numeric standards for nitrogen and phosphorus for water bodies within the 31states comprising the Mississippi River Basin ("Basin States"). Gulf Restoration Network v. Jackson,E.D. La., No. 2: 12-cv-00677 ("GRN Suit"). The complaint alleges that EPA has failed to developnumeric water quality criteria for nitrogen and phosphorus in the Basin States. EPA's answer states that itis appropriately deferring to each state to promulgate numeric nutrient criteria ("NNCs") that satisfyClean Water Act water quality standards within the state and that, consequently, federal NNCs are notappropriate. The trial judge ruled on September 19, 2012 that the case will be decided on "cross-motionsfor summary judgment, with no initial disclosures or other discovery." In the same order, the judge set abriefing schedule for the parties (including numerous entities to which the court granted permission tointervene) that will extend through the beginning of June of next year.

The GRN Suit, as well as other similar suits that are active in other regions, have prompted many stateenvironmental agencies to work diligently, pursuant to EPA's deference and also its demand, to developNNCs as quickly as possible. If EPA wins the GRN Suit, the Basin States will have to be ready to goforward with promulgation of their NNCs. If EPA loses, they may be subjected to more stringent federalNNCs on a "one size fits all" basis. A settlement could mean an even different outcome for all oftheparties.

In Mississippi, the state's Department of Environmental Quality ("MDEQ") has formed a NutrientTechnical Advisory Group (TAG) to develop scientifically defensible NNCs that are appropriate forMississippi's surface waters. The TAG is composed ofMDEQ staff, MDEQ's external consultants andin-state university personnel who have water quality expeiiise and is meeting on a regular basis. MDEQstaff members have stated that the agency's plan is to have draft NNCs developed for all state waters,excluding the heavily agricultural Delta counties, by June 30, 2013. The draft NNCs for the Delta are tobe developed by November 30, 2014. MDEQ wil then publish these draft NNCs for public comment.

MDEQ has held several stakeholder meetings to discuss the development of Mississippi's NNCs and toprovide an opportunity for questions and comments. The MDEQ staff members have consistentlyexplained that they are considering "what is protective of the environment" rather than "what istechnically achievable." The new NNCs wil be "worked into permits" as they come up for renewal andpermittees wil be allowed a "reasonable time frame" to come into compliance with the new NNCs.

The key issue for the regulated community in Mississippi, as in other states, will be the cost ofcompliance with these new NNCs, which could bear a very expensive price tag. In Florida, for example,a national environmental engineering consultant prepared an economic analysis of proposed NNCs. Theestimate for direct compliance costs ranged from $ 1.5 bilion annually (best management practices forimpaired water categories) to $4.5 billion annually ("end of pipe" requirements for all water categories).Regulated communities in Mississippi and in other states across the country are engaging with scientificand economic data and consultants in order to have an impact concerning this volatile issue. A lot is onthe line.

American College of Environmental Lawyers, The ACOEL, is a professionalassociation of lawyers distinguished by experience and high standards in the practice of environmental law, ethics, and the development of environmental law.